Marwick's Pianos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,508 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $958 per month $4,822 per month, plus 3% of sales $58 per piano sold $643 per month $4,959 per month Depreciation of sales facilities Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos. $13,582 per month $715 per month $2,526 per month, plus $42 per piano sold $892 per month Required: 1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.
Marwick's Pianos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,508 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $958 per month $4,822 per month, plus 3% of sales $58 per piano sold $643 per month $4,959 per month Depreciation of sales facilities Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos. $13,582 per month $715 per month $2,526 per month, plus $42 per piano sold $892 per month Required: 1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Marwick's Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,508 per unit and then sells them
to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are
presented below:
Costs
Selling:
Advertising
Sales salaries and commissions
Delivery of pianos to customers
Utilities
Depreciation of sales facilities
Administrative:
Cost Formula
$958 per month
$4,822 per month, plus 3% of sales
$58 per piano sold
$643 per month
$4,959 per month
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos.
$13,582 per month
$715 per month
$2,526 per month, plus $42 per piano sold
$892 per month
Required:
1. Prepare a traditional format income statement for August
2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down
through contribution margin.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffcd7ca60-834e-4400-8353-07bf2d368103%2F0ce8ca0e-dd57-4809-8eb8-3f633d74610b%2Fbf6ulnk_processed.png&w=3840&q=75)
Transcribed Image Text:Marwick's Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,508 per unit and then sells them
to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are
presented below:
Costs
Selling:
Advertising
Sales salaries and commissions
Delivery of pianos to customers
Utilities
Depreciation of sales facilities
Administrative:
Cost Formula
$958 per month
$4,822 per month, plus 3% of sales
$58 per piano sold
$643 per month
$4,959 per month
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos.
$13,582 per month
$715 per month
$2,526 per month, plus $42 per piano sold
$892 per month
Required:
1. Prepare a traditional format income statement for August
2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down
through contribution margin.
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